Coca-Cola Buying Remaining Stake Of BODYARMOR For $5.6 Billion: Details

By Annie Baker ● Nov 2, 2021
  • The Coca-Cola Company (NYSE: KO) announced this week that it has acquired full ownership of BODYARMOR. These are the details.

The Coca-Cola Company (NYSE: KO) announced this week that it has acquired full ownership of BODYARMOR, which is a line of sports performance and hydration beverages that is incremental to the Coca-Cola beverage portfolio and has significant potential for long-term growth.

In 2018, Coca-Cola had initially acquired a 15% stake in BODYARMOR with a path to full ownership, based on a pre-determined discount. And Coca-Cola is paying $5.6 billion in cash for the remaining 85% of the company.

BODYARMOR is going to be managed as a separate business within Coca-Cola’s North America operating unit and will continue to be based in New York. And under a separate consulting and transition-services agreement, the executive leadership team, including Co-founder and Chairman Mike Repole and President Brent Hastie has agreed to continue to work to maintain the brand’s successful momentum in the market. They are committed to executing BODYARMOR’s 2022 plan and working on vision and strategy for 2023 and beyond.

BODYARMOR is going to continue to be distributed by the U.S. Coca-Cola bottling system. And when Coca-Cola made its initial investment in 2018, BODYARMOR gained access to the Coca-Cola system – which enabled BODYARMOR to accelerate its growth to meet explosive consumer demand for premium sports and hydration beverages. BODYARMOR is now currently the #2 sports drink in the category in measured retail channels, growing at about 50% to drive more than $1.4 billion in retail sales.

As part of the agreement, Coca-Cola and Repole are going to collaborate on the company’s still beverages portfolio, including marketing, packaging and innovation strategies across multiple brands.

Coca-Cola’s acquisition of BODYARMOR will be funded with cash on-hand and is consistent with an M&A and capital allocation framework that focuses on accelerating growth, expanding capabilities and driving efficiencies. And Coca-Cola pursues brands and products that are complementary to the overall portfolio and have growth opportunities for the long term.

KEY QUOTES:

“BODYARMOR has been a great addition to the system lineup over the last three years, and the company has driven continuous innovation in hydration and health-and-wellness products. We’re excited to bring BODYARMOR into The Coca-Cola Company and work with Mike Repole and his leadership team on the next stage of growth.”

— Alfredo Rivera, president of the North America operating unit of The Coca-Cola Company

“Ten years ago, we set out with a vision to create a better-for-you sports drink with a goal of becoming the #1 global sports drink,” Repole said. “Our talented leadership team under Brent Hastie, our 400 dedicated employees and incredible Coca-Cola bottling partners have helped us build this remarkable brand. If it wasn’t for Kobe Bryant’s vision and belief, BODYARMOR would not have been able to achieve the success we had. I couldn’t be more excited to become part of the Coca-Cola family and set our sights on the future.”

— BODYARMOR Co-founder and Chairman Mike Repole